Inflation in Laos reaches over 30 per cent

Faced with a debt crisis and various other economic problems, Laos saw its inflation jumping to 30.1 per cent year-on-year in August from 25.6 per cent in July, according to the latest report from the Lao Statistics Bureau. Higher prices of fuel and consumer goods and the continuing depreciation of the Lao currency kip are among the main factors driving the inflation, the bureau said. Prices for food and non-alcoholic beverages have surged by 30.2 per cent annually, including daily essentials like rice, starch, meat, fat, vegetable oil, fruits and vegetables. Costs in the communications and transport category rose by…

Faced with a debt crisis and various other economic problems, Laos saw its inflation jumping to 30.1 per cent year-on-year in August from 25.6 per cent in July, according to the latest report from the Lao Statistics Bureau.

Higher prices of fuel and consumer goods and the continuing depreciation of the Lao currency kip are among the main factors driving the inflation, the bureau said.

Prices for food and non-alcoholic beverages have surged by 30.2 per cent annually, including daily essentials like rice, starch, meat, fat, vegetable oil, fruits and vegetables.

Costs in the communications and transport category rose by 51.7 per cent year-on-year in August.

In addition, the cost of housing, water, electricity and gas category increased by 20.5 per cent year-on-year, the bureau noted.

“More proactive measures” to be taken

In response to the economic woes, the Lao government has reiterated its pledge to impose “more proactive measures” to address the country’s economic problems.

The government in Vientiane instructed relevant agencies in late August to take “stronger actions” to address issues ranging from macro-economic vulnerability to improvement of the investment climate and repayment of debts, as well as the fight against natural disasters.

Expensive railway project

One of the major underlying problems for Laos is that the country entered huge debt obligations to China to finance mainly Chinese-backed projects, which include loans to fund Laos’ 30 per cent share of the $5.9-billion China-Laos high-speed railway, a project that became operational in December 2021.